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1. X sends sends back back $800 $800 of fault faulty y good goodss to Y in which book of prime entry would Y record this transaction? (A) General Journal (B) Purchases Journal (C) Sales Journal (D) Sales Returns Journal 2. If the following lists lists of assets found on the Balance Sheet of a retail trader were to be arranged in order of liquidity; the sequence would be (A) Motor Van, building, bank, fixtures, cash, debtors (B) Cash, fixtures, debtors, bank, building, motor van (C) Cash, bank, fixtures, debtors, motor van, building (D) Cash, Bank, debtors, fixtures, motor van, building 3. Which of the following following are real accounts? I. Furniture A/c II. Debtors A/c III. Capital A/c IV. Motor Van A/c (A) I and II only (B) I and IV only (C) II and III only (D) II and IV only 4. The assets of a business total total $3 200 and the liabilities total $820. What is its capital? capital? (A) $2 038 (B) $2 380 (C) $4 000 (D) $4 020 5. Which of the following following states the correct order of the stages in the accounting cycle? (A) Journalizing, Posting to the ledger, Trial Balance, Final Accounts (B) Journalizing, Trial balance, Posting to the ledger, Final Accounts (C) Posting to the ledger, Journalizing, Trial Balance, Final Accounts (D) Posting to the ledger, Trial Balance Journalizing, Final Accounts
6. A retailer retailer purchases purchases goods worth worth $3 000. 000. He receives receives 30 per cent trade discount and 5 per cent cash discount. How much should he pay pay for the goods? (A) $1 995 (B) $2 095 (C) $2 100 (D) $2 850
7. On December 31, 1978, the Balance Balance Sheet of Mr. Mr. J. W. Ward showed the following: Fixed Assets Current Assets Liabilities Liabilities
$80 000 $35 000 $30 750
What was his capital? (A) $45 250 (B) $65 000 (C) $80 000 (D) $84 250 8. An article article is subject subject to a 20% trade discount. discount. Its list list price is $600. What is the sale price? price? (A) $120 (B) $480 (C) $580 (D) $720 9. Mrs. Green is a dry goods merchant. Which of of the following transactions transactions would result in a debit to her Cash Account? (A) Sold goods for cash (B) Paid cash to office cleaner (C) Bought goods for cash (D) Paid installment on loan
10. The trial balance is a statement which helps us to (A) Discover all types of errors (B) Determine the arithmetical accuracy of postings (C) Prove that transactions have been recorded in the proper accounts accounts (D) Prove that transactions have been correctly analysed 11. Which of the following statements describes real accounts? (A) The return accounts which appears in the Trading Account (B) Purchases and Sales Accounts which appears in the Trading and Profit and Loss Account. (C) Records of property which appear in the Balance Sheet (D) All debtors’ and creditors’ accounts shown in the subsidiary subsidiary ledgers 12. A trader received an invoice for $4 000 less 25% trade discount. discount. Subsequently he returned returned one-eighth of the value of of the goods. What amount would be be entered in his Returns Outwards Account? (A) $375 (B) $400 (C) $450 (D) $500
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13. Which of the following transactions transactions should be debited in the Cash Account?
17. The amount for total fixed assets is
(A) Bought goods for cash from J. Jones (B) Paid office cleaner by cash (C) Sold goods for cash (D) Paid on loan account
(A) $ 9 000 (B) $14 000 (C) $14 600 (D) $15 050
14. A businessman bought a new typewriter for $6 000. He paid $4 000 in cash and traded in his old typewriter. What is the entry entry to record record this transaction? DR CR (A) New typewriter $6 000 Old typewriter 2 000 Cash 4 000 (B) Old typewriter 2 000 Cash 4 000 New typewriter 6 000 (C) New typewriter 4 000 Cash 2 000 Old typewriter 6 000 (D) Old typewriter 2 000 Cash 4 000 New typewriter 6 000
18. The amount for the total current assets is
15. Which of the following groups would be regarded as examples of current assets? (A) Vehicles, equipment, machinery, typewriter (B) Debtors, stocks, creditors, cash at bank (C) Bank overdraft, machinery, debtors, stock (D) Stock, cash at bank, debtors, cash in hand 16. Goods Goods previously previously bought bought for $90 are are returned returned by the buyer to D. Fine. How should this be recorded in the buyer’s journal? (A) Dr. D. Fine’s A/c Cr. Returns Outwards A/c (B) Dr. D. Fine A/c Cr. Returns Inwards A/c (C) Dr. Returns Inwards A/c Cr. D. Fine’s A/c (D) Dr. Returns Outwards A/c Cr. Goods A/c Item 17 –18 refer to the Balance Sheet below Balance Sheet of Boot’s Sports Store as at Dec. 31, 1992. $ $ Capital 12 000 Land & Buildings 9 000 + Net Profit 4 000 Motor Van 5 000 16 000 Fixtures & fittings 600 - Drawings 50 5 00 Stock 450 15 500 Debtors 250 Creditors 2 100 Bank 2 000 Cash 300 17 600 17 600
(A) $2 550 (B) $3 000 (C) $3 600 (D) $8 600 Item 19 refers to the following information information
Cash A/c $ Opening balance 400 3.5.94 Rent 1.5.94 Sales 150 7.5.94 Wages 7.5.94 Sales 75 9.5.94 Tax Closing balance 625 19. From the account above, which of the following figures will be posted to the trial balance? (A) $150 (B) $400 (C) $405 (D) $625 20. An increase in drawings will result in (A) An increase in long-term liabilities liabilities (B) A decrease in capital (C) A decrease in current liabilities liabilities (D) An increase in capital 21. A credit balance in the Cash Book indicates that (A) There is a balance in the bank (B) Too much cash is paid out of the office (C) The bank balance is overdrawn (D) Too many discounts are allowed 22. Which of the following following are functions functions of a bookkeeper? I. Analysing II. Interpreting III. Posting IV. Recording (A) II and III only (B) III and IV only (C) I, II and III only (D) I, II and IV only
$ 50 20 150 405 625
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23. Which of the following sets of accounts will contain only debit entries in the Trial Balance?
(B) $190 (C) $210 (D) $300
(A) Discount received, stock, purchases returns, salaries (B) Sales returns, wages paid, machinery, discount allowed (C) Wages due, rent, sales returns, discount allowed (D) Salaries due, discount received, sales returns, stock
29. The proprietor of a business took home an old office desk valued on the books at $450. How should this transaction be recorded in his books?
24. The accounting cycle entails the following procedures:
(A) Dr. Office Furniture A/c; Cr. Drawings A/c (B) Dr. Profit & Loss A/c; Cr. Office Furniture A/c (C) Dr. Drawings A/c; Cr. Office Furniture A/c (D) Dr. Office Furniture A/c; Cr. Capital A/c
I. Posting to the ledger II. Making adjusting and closings entries III. Journalizing IV. Preparation of final accounts V. Extracting a trail balance (A) III, I, II, V, IV (B) III, I, V, II, IV (C) I, III, V, II, IV (D) III, I, V, IV, II 25. The gross profit of a firm is $3 600, bad debts $100, rent paid $120, rent prepaid $20, general expenses $80 and discount received $110. The net profit is (A) $3 400 (B) $3 410 (C) $3 430 (D) $3 710 26. Which of the following expresses the balance sheet equation? (A) Capital = Assets + Liabilities (B) Assets = liabilities – Capital (C) Liabilities = Assets + Capital (D) Liabilities = Assets – Capital 27. Which of the following are nominal accounts? I. Wages II. Creditors III. Purchases IV. Furniture (A) I and III only (B) I and IV only (C) II and III only (D) II and IV only
28. On January 1, a trader bought 100 articles at $5 each. During the month, 70 of the articles were sold at $8 each and the remainder were sold on January 31 at the market value of $3 each. What was the gross profit for the month. (A) $150
Item 30 refers to the following information.
Cost of stock purchases Trade discount
$400 10%
30. What is the cost of purchases entered in the ledger? (A) $360 (B) $390 (C) $410 (D) $440
31. A Supplier offers the following discounts. Trade discount 12.5% off list and cash discounts of 3%. What is the lowest amount that will be paid for goods with a list price of $1 600? (A) $1 358 (B) $1 400 (C) $1 552 (D) $1 600
32. When a company declares a dividend of 15%, the dividend warrant sent to the shareholder owning 1 500 $1 ordinary shares is (A) $100 (B) $225 (C) $1 500 (D) $1 515 33. A bookkeeper discovers that an amount paid to a supplier has been wrongly entered in another supplier’s account. What book of original entry will the bookkeeper use when correcting this error? (A) Cash book (B) General Journal (C) Purchases Day Book (D) Sales Day Book 34. A supplier’s account in a customer’s books has a credit balance of $8000. What does this mean? (A) The customer owes the supplier $8000 (B) The customer has paid the supplier $8000
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(C) The supplier has paid $8000 (D) The supplier owes $8000 35. At the end of the year, the capital of a business was $33 000. At the beginning of the year, the capital was $28 000. During the year, the owner withdrew for personal use $2 000. What is his net profit for the year? (A) $5 000 (B) $7 000 (C) $30 000 (D) $61 000 36. The maximum capital a company can issue to the public is called
5 000 2 400 4 600 700 4
41. What is the working capital? (A) $5 000 (B) $6 500 (C) $7 200 (D) $11 300 42. A trader had an opening capital of $3 900. His drawings were $900 and his closing capital was $4 860. What was the net profit?
(A) Authorised capital (B) Issued capital (C) Subscribed capital (D) Paid up capital
(A) $900 (B) $960 (C) $1 860 (D) $3 000
37. A limited liability company is owned by
43. An employee works for 45 hours each week. He is paid $4 per hour for a basic 40-hour week and $6 per hour for overtime. His gross weekly wage is
(A) The state (B) Private shareholders (C) The public at large (D) A limited number of partners 38. Which of the following tasks would NOT normally be carried out by a book-keeper?
IV.
Cash at bank and in hand Trade debtors Stock in hand Accrued expenses ra e cre tors
I. Keeping the journal II. Extracting the trial balance III. Drawing up the balance sheet Auditing the accounts (A) I and II only (B) I and III only (C) II and IV only (D) III and IV only 39. When comparing the books of a company with the books of a sole trader, which of the following items on a Balance Sheet would differ MOST in presentation? (A) Capital (B) Current Assets (C) Current Liabilities (D) Fixed Assets
40. Which of the following transactions will NOT be recorded in the Purchases Day Book of a grocery shop? (A) Bought from K. Leen goods $500 (B) Purchased goods on credit $975 (C) Bought chicken on credit $100 (D) Purchased cash register on credit $1 200
(A) $180 (B) $190 (C) $240 (D) $270 44. What would be the effect on a firm’s Balance Sheet of the purchase of equipment on credit? (A) Asset increased; liability decreased (B) Asset increased; liability increased (C) Asset decreased; liability increased (D) Asset decreased; liability decreased 45. Mr. Jones business began the month with an overdraft of $1 200. During the month, total deposits were $2 000 and total payments were $600. What was the Cash Book balance at the end of the month? (A) Credit balance of $200 (B) Debit balance of $200 (C) Credit balance of $600 (D) Debit balance of $1 400
46. A business operates its petty cash on the imprest system. At the beginning of the month, the petty cashier was given $200 out of which she spent $152. How much will she be reimbursed? (A) $48 (B) $152 (C) $200 (D) $352
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47. On January 12, 1994, a merchant purchased goods amounting to $120 on the following terms: 5% cash discount if paid within 30 days. He settled his debt on February 28, 1994. How much did he pay? (A) $112 (B) $114 (C) $120 (D) $126
(A) R. Smith (Supplier) (B) Rent Received (C) Bad debts recovered (D) Purchases 53. Closing stock at year end is incorrectly valued. Which of the following will be affected?
48. Morris purchased $1 000 worth of furniture for office use and entered it in the journal as purchases. How will this error affect his Balance Sheet? (A) Fixed assets and net profit will be decreased by $1000 (B) Fixed assets and net profit will be decreased by $1000 (C) Current assets and net profit will be increased by $1000 (D) Current assets and net profit will not be affected Items 49 - 50 refer to the following information. DR. $
CR. $
Dec. 1 Balance b/f 5 Cheque 90 14 Unit Trust: Standing order 100 20 P. Palmer: Credit Transfer 30 29 Bank charges 85 49. The balance as per bank statement was a
Balance $ 60
(A) Credit balance of $5 (B) Debit balance of $65 (C) Credit balance of $125 (D) Debit balance of $5 50. Which of the following does this Bank Statement balance represent? (A) An overdraft (B) A direct debit (C) A credit transfer (D) A dishonoured cheque
51. When a proprietor withdraws cash or other assets from a business, what effect does it have on capital?
I. Cost of sales II. Gross profit III. Net purchases IV. Working capital (A) I and II only (B) III and IV only (C) I, II and IV only (D) II, III and IV only 54. H. Stone has a manufacturing business: His expenses are as follows: Factory lighting Factory wages Office salaries General Administrative expenses
1 000 2 000 2 500 4 000
How much is his total direct expenses? (A) $1 000 (B) $2 000 (C) $3 000 (D) $4 000 Items 55 – 56 refer to the following balances taken from the books of Sherida’s Ltd. on April 30, 1997. BALANCES
Rent owing Cash Creditors Prepaid insurance Bank overdraft
$ 200 3 500 1 200 300 400
55. What is the working capital of Sherida’s Ltd? (A) $2 000 (B) $2 400 (C) $3 600 (D) $3 800
56. What is the Current Ratio of Sherida’s Ltd? (A) Drawings are decreased (B) Capital is increased (C) Neither drawings nor capital is affected (D) Capital is decreased 52. Which of the following accounts does NOT have a credit balance
(A) 1:1 (B) 1.5:1 (C) 2.1:1 (D) 3.1:1 57. In a factory, raw materials used amounted to $4 000, manufacturing wages $1 200 and other direct
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expenses $400. What was the prime cost of articles produced? (A) $4 400 (B) $4 800 (C) $5 200 (D) $5 600
(C) $684 (D) $846
62. A club’s Income and Expenditure Account performs the same functions as a firm’s
58. When 5% is added to the production cost, the value transferred to the Trading Account is $26 250. The gross trading profit is $6 500 and the expenses total $5 500. Under which of the following conditions would the net profit be $2 250?
(A) Petty cash book (B) Trading and Profit and Loss Account (C) Cash and Bank Accounts (D) Balance Sheet 63. A non-trading organisation is MAINLY concerned with. (A) Making maximum profit for the proprietor (B) Providing various services for its members (C) Importing goods for resale (D) Trading only with wholesalers
(A) Inclusion of production profit (B) Exclusion of production profit (C) Inclusion of production cost (D) Exclusion of gross profit
64. A businessman incurred the following expenses: 59. Which of the following would NOT be considered part of the prime cost of manufactured goods? (A) Office Manager’s wages (B) Machine operator’s wages (C) Raw material used (D) Freight on raw material
$6 000 $2 000 $3 000 $7 000
What is the total capital expenditure?
Item 60 refers to the following information.
Opening stock of raw materials Purchases Closing stock of raw materials Direct labour Factory overheads Opening stock of work in progress Closing stock of work in progress
Factory Repairs Machinery Repairs New Machine New Vehicle
500 2 000 1 000 3 000 4 500 2 000 3 000
(A) $6 000 (B) $7 000 (C) $8 000 (D) $10 000 65. The net profit of a firm was shown as $1 600 and was later discovered that discounts received were undercast by $10 and purchases were understated by $36. What was the corrected net profit?
60. What is the cost of goods manufactured? (A) $1 574 (B) $1 610 (C) $1 636 (D) $1 646
(A) $7 000 (B) $8 000 (C) $9 000 (D) $11 000
Item 65 refers to the following information:
61. The following deductions are made from the salary of an employee: DEDUCTIONS Income Tax 35% National Housing 2% Education Tax 1%
- The provisions for bad debts for the year is to be 8% of closing debtors. - Closing debtors totaled $9 000. - The balance presently in the Provision for Bad Debts Accounts is $900. 65. What is the correct entry required to reduced the Provision for Bad Debts Account?
What is the total amount which should be deducted from the employee’s salary of $1 800 per month? (A) $486 (B) $648
(A) Dr. Profit & Loss A/c $180 Cr. Provision for Bad Debts A/c $180 (B) Dr. Provision for Bad Debts A/c $720 Cr. Profit & Loss A/c $720 (C) Dr. Provision for Bad Debts A/c $180 Cr. Profit & Loss A/c $180
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(D) Dr. Provision for Bad Debts A/c $900 Cr. Profit & Loss A/c $900
I. Jones utilizes a Cash Book to record all transactions. An analysis of the Cash Book for the year ended December 31, 1999 shows:
Item 66 refers to the following information. $ $ I 7 300 Purchases 7 000 Carriage inwards 300
$ Receipts from customers 200 000 Cash to begin the business 300 000 Payments for goods bought 90 000 Electricity 10 000 Rent 5 000 Interest on loan 1 000 Loan for the business 100 000 Cash withdrawn to fix Jones’ house 8 000 70. What is Jones’ balance at December 31, 1999?
To record the closing and transfer of the Purchases and carriage inwards Account at the end of the period 66. Which account is represented by I? (A) Income and expense (B) Profit and Loss (C) Trading (D) Suspense
(A) Credit balance of $296 000 (B) Debit balance of $296 000 (C) Credit balance of $486 000 (D) Debit balance of $486 000
Item 67 refers to the following information. Insurance A/c 1998 Jan 2 15
$ Balance b/d Bank
700 8 000
1998 Dec 31 31
Profit & Loss A/c Balance c/d
8 700
$ 8 100 600 8 700
67. What is the amount of insurance prepaid? (A) $600 (B) $700 (C) $8 000 (D) $8 100
68. A suspense account shows a debit balance. Which of the following could give rise to such a balance? (A) The discount received was undercast in the Cash Book (B) The figure taken from an invoice is incorrect but the postings are correct (C) The bookkeeper cannot find a sales invoice. (D) Cash received has been credited twice to the debtor’s account Item 69 refers to the following information below:
Extract from the pay slip of V. Jones Net Pay $1 200 Income tax 300 National Insurance 50 69. What is the gross pay for V. Jones? (A) $850 (B) $950 (C) $1 450 (D) $1 550 Item 70 – 71 refer to the following data:
71. What figure would appear in Jones’ balance sheet as at December 31, 1999, as capital introduced during the year? (A) $100 000 (B) $292 000 (C) $300 000 (D) $400 000 72. Personal accounts are found in the (A) Debtors and creditors ledger (B) Creditors accounts (C) Debtors account (D) Private ledger and journal
73. The ABC Company deposited a cheque received from Mr. Murray for $300. How must this transaction be recorded in ABC’s books? I. II. III. IV.
Credit the Cash Book $300 Credit Murray’s Account Debit The Bank Account Debit the Cash Account
(A) I and II only (B) I and IV only (C) II and III only (D) II and IV only 74. A machine costs $10 000. It has an expected life of six years and a residual value of $400. Using the straight-line method, what is the depreciation per annum? (A) $1 600 (B) $2 400 (C) $9 600
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(D) $10 400 75. Control accounts are kept so as to assist management in (A) Limiting expenditure (B) Locating errors (C) Increasing profits (D) Limiting drawings 76. What is the balance of cash at the end of the month for a club which showed the following Summary of Receipts and Payments at the end of the month? Subscription received $300 Rent paid 60 Purchase of games and Equipment 150 Postage of circulars 20 Proceeds from book sale 250 (A) $180 (B) $280 (C) $320 (D) $620 Item 77 refers to the following extract from T. Armand’s Balance Sheet
Closing capital Net Profit Drawings
$4 500 1 250 750
I. Bank charges were not entered in the Cash Book II. Cheques were drawn and presented for payment on the same dates III. Bank transfer was not entered in the Cash Book IV. Bank deposit was not shown on the Bank Statement (A) I, and III only (B) III and IV only (C) I, III and IV only (D) II, III and IV only
81. Under which of the following conditions would a trial balance still balance? I. A transaction was completely left out. II. Both a debit and credit entry were overstated by the same amount III. A debit entry was left out. IV. Both a debit and a credit entry were understated by the same amount. (A) I, II and III only (B) I, II and IV only (C) I, III and IV only (D) II, III and Iv only 82. A trader sent Mr. Jones an invoice charging him for 10 articles at $68 each instead of $65 each. Which type of note should the trader subsequently send to Mr. Jones?
77. What was his opening capital? (A) $2 500 (B) $4 000 (C) $5 000 (D) $6 500 78. Tom, Percy and John formed a partnership and agreed that profits were to be shared in the ration 1:1:2 respectively. The net profit for the year was $18 900. What was John’s share of profit? (A) $4 725 (B) $9 450 (C) $14 175 (D) $18 900 79. A business has total assets valued at $225 000 and total liabilities at $ 97 000. The owner values the business at $150 000. What is the goodwill? (A) $22 000 (B) $53 000 (C) $75 000 (D) $128 000
80. Which of the following would cause the Cash Book to disagree with the Bank Statement?
(A) Promissory note (B) Advice note (C) Debit note (D) Credit note Smith, Brown and Robinson are partners who share profits in the proportion of their capitals of $5000, $2000 and $1000 respectively. Net Profit is $7 100 Interest on capital is 5% Robinson is paid a salary of $300 83. Total interest on capital is (A) $50 (B) $100 (C) $250 (D) $400 84. Robinson’s share of the net divisible profit is (A) $800 (B) $1 600 (C) $4 000 (D) $6 400
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85. Smith’s current account is credited with (A) $1 175 (B) $1 700 (C) $4 250 (D) $6 400
I. II. III. IV.
86. What adjusting entry is necessary to record provision for bad debts? (A) Dr. Profit & Loss A/c; Cr. Provisions for Bad (Doubtful) Debts A/c (B) Dr. Cash A/c; Cr. Provisions for Bad (Doubtful) Debts A/c (C) Dr. Provisions for Bad (Doubtful) Debts a/c; Cr. Profit & Loss A/c (D) Dr. Trading A/c; Cr. Provisions for Bad (doubtful) Debts A/c
87. Which journal entry is required in the books of B. Jones who started a business by depositing $8000 into the business bank account?
(A) I, II and III only (B) I, II and IV only (C) I, III and IV only (D) II, III and IV only Item 91 refers to the following information.
Stock January 1 Purchases Gross Profit Sales Stock December 31
$300 3400 1500 4500 700
91. What is the rate of stock turnover?
92. At the start of the financial year, a trader owed his creditors $3 200. He paid cash of $14 900 to them during the year, and at the end of the year the balance due to his creditors was $2 800. What is the trader’s credit purchases for the year?
88. P Hawk has a manufacturing business, his raw materials cost $1 900; rates and rent total $2 000 and factory wages amounted to $2 500. The number of units produced is 640. What is the cost of one unit? (A) $4 (B) $6 (C) $10 (D) $13 Item 89 refers to the following information
10 000 16 000 3 000 5 000
89. What is the year’s cost of production of finished goods? (A) $14 000 (B) $18 000 (C) $21 000 (D) $24 000
Debit expenses Exclude capital items Include all receipts and payments Credit income
(A) 2 times (B) 3 times (C) 6 times (D) 9 times
(A) Debit Bank Account Credit Capital Account (B) Debit Bank Account Credit B. Jones Current Account (C) Debit Capital Account Credit Bank Account (D) Debit B. Jones Account Credit Capital Account
Prime Cost Overheads Work in progress January 1 Work in progress December 31
90. Which of the following should be done when preparing income and expenditure accounts?
(A) $12 100 (B) $14 500 (C) $15 300 (D) $17 700 93. A public limited company issued a prospectus offering the following shares for sale at par value. Type Amount Par Value Ordinary 20 000 $2.00 5% Preference 10 000 $5.00 If the issue was fully subscribed, how much capital did the company raise? (A) $30 000 (B) $40 000 (C) $50 000 (D) $90 000 94. The information below was extracted from the Cash Book of Dandy Dare. Total unpresented cheques Lodgement not entered on bank statement Balance per Cash Book Which is the balance per Bank Statement?
$120 $150 $560
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(A) $120 (B) $150 (C) $340 (D) $530 95. Which of the following items are related to a consumer cooperative? I. Patronage Dividends II. Ordinary Dividends III. Dividends on capital IV. Preference Dividends (A) (B) (C) (D)
I and III only I and IV only II and III only II and IV only
96. On May 1, a petty cashier received an imprest of $150. During the month, petty cash expenses amounted to $77.00 and $2.00 was received from a member of staff who made a personal telephone call. How much cash is needed to restore the imprest on May 31? (A) $73.00 (B) $75.00 (C) $77.00 (D) $150.00 97. Which of the following must be filed with the Registrar of Companies to establish a PRIVATE Joint Stock Company? I. Articles of Association II. Memorandum of Association III. Share Certificates IV. Prospectus (A) I and II only (B) I and IV only (C) II and III only (D) III and IV only
98. In the trading account, returns outwards is deducted from (A) Carriage outwards (B) Carriage inwards (C) Purchases (D) Sales Item 99 refers to the following information. ASSETS LIABILITIES CAPITAL $ $ $ I 100 000 50 000 40 000 II 250 000 100 000 150 000 III 15 000 22 000 8 000 99. In which of the cases above does a ‘loss’ exist?
(A) I and II only (B) II and III only (C) III only (D) I, II and III 100. Which of the following tasks must be completed in payroll accounting before a trial balance can be prepared? I. II. III. IV.
Providing the payroll register Posting the payroll totals Recording payment of employees and payroll returns Preparing employees income-tax returns
(A) I and II only (B) I and IV only (C) II and III only (D) II and IV only 101. The process of putting financial records in their analysis form is called (A) Accounting (B) Adjusting (C) Record keeping (D) Decision making 102. Joanne Barrett is a dressmaker. She buys 100 metres of material from S. Wright for $100 cash. The correct double entry for this transaction in Barrett’s ledger would be to (A) Dr. Materials A/c; Cr. S. Wright’s A/c (B) Dr. Materials A/c; Cr. Cash A/c (C) Dr. Cash A/c; Cr. S. Wright’s A/c (D) Dr. Cash A/c; Cr. Materials A/c 103. Mr. Harry, a grocer, bought a typewriter on credit from Tan Company. Which of the following journal entries will be made for this transaction in Mr. Harry’s books? (A) Dr. Purchases A/c; Cr. Tan A/c (B) Dr. Typewriter A/c; Cr. Cash A/c (C) Dr. Tan A/c; Cr. Purchases A/c (D) Dr. Typewriter A/c; Cr. Tan Company 104. The account which discloses the gross profit or loss is called the (A) Profit and Loss A/c (B) Appropriation A/c (C) Trading A/c (D) Cash A/c 105. Which of the following claims are ranked in order of priority, if a company is liquidated? (A) Ordinary Shares, preference shares, debentures
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(B) Debentures, ordinary shares, preference shares (C) Preference shares, ordinary shares, debentures (D) Debentures, preference shares, ordinary shares
111. P admits Q in partnership on the following terms: I. Q brings $5 200 in cash into the business II. $300 is to be paid out to P and is to appear in the books of the partnership as goodwill.
106. Which of the following accounts are NOT grouped according to the classes to which they belong? (A) Rent received, interest received, commission received (B) Machinery, building, cash (C) Capital, creditor, land (D) Rent owing, salaries payable, mortgage payable
The entry in the Cash Book would be (A) Q’s Capital
Item 107 refers to the following information which was taken from a club’s records.
1994 Jan. 01 Locker rental outstanding Dec. 31 Locker rental collected Dec. 31 Locker rental prepaid for 1995
Q’s Capital
Cash Book 5 200 Goodwill
300
(C) Goodwill
107. How much would be entered for the locker rental in the Income and Expenditure Account for the year ended December 31, 1994?
Cash Book 300 Q’s Capital
5 200
Cash Book 300 Q’s Capital
4 900
(D) Goodwill
(A) $360 (B) $380 (C) $400 (D) $420
112. In partnership accounting each Partner’s share of profits is post to the (A) Appropriation Account (B) Capital Account (C) Current Account (D) Drawings Account
108. Mr. Allen invested $20 000, Mr. Brown invested $5 000 and Mr. Cable invested $5 000. The loss sustained during the year was $1 000. The partnership agreement is silent on the item of losses. Although profits are to be split 2/5, 2/5,1/5 respectively. How much of the loss must be borne by Mr. Cable?
113. Which of the following transactions will NOT affect the capital?
(A) $400 (B) $300 (C) $240 (D) $200
(A) Owner takes money out of the business bank account for his own use (B) Owner pays creditor from private money outside the firm (C) Owner buys additional shop premises, paying by cheque (D) Owner introduces more money into the firm
109. When a company issues new shares at a price above face value, the increase is (A) Gross profit (B) Net profit (C) Capital profit (D) Normal profit
(A) $1 000 (B) $2 000 (C) $8 000 (D) $10 000
300
(B)
$ 30 400 10
110. Joyce and Keller are in partnership having capital of $14 000 and $18 000 respectively. Before admitting a new partner, Wong with $10 000 into the business, they agreed that the partnership be valued at $42 000. The goodwill is therefore
Cash Book 4 900 Goodwill
Item 114 refers to the following Journal entries.
Dr July 1 John Brown’s A/c 500 To Machine A/c Being credit sale of machine I
II
III
John Brown
Machine
Machine A/c 500
John Brown’s A/c 500 Machine A/c
Cr 500
12
John Brown
500
IV
Sales A/c John Brown 500 114. What are the corresponding ledger entries?
(A) I and III only (B) I and IV only (C) II and III only (D) III and IV only 115. A and B had a partnership and shared profits and losses 2/3 and 1/3 respectively. They admitted C to partnership. In addition to capital, C had to pay for Goodwill $3 600. How much did A and B receive as their respective share of Goodwill?
(A) $1 000 (B) $1 900 (C) $2 000 (D) $2 100 Items 119 – 121 refers to the following information J. Baynes Manufacturing A/c for the period ending Dec. 31, 1992 Stock of Raw materials 1.1.92 800 Balance c/d 6800 Purchases of raw material during the year 4500 5300 Less closing stock of raw materials 31.12.92 1200 3900 Production wages 1300 Fuel and power 900 Lubricants 100 Rent and rates 400 Insurance 200 6800 6800
119. What is the cost of raw materials available for production?
(A) A receives $1 200 B receives $2 400 (B) A receives $2 400 B receives $1 200 (C) A receives $1 800 B receives $3 600 (D) A receives $3 600 B receives $3 600
(A) $800 (B) $3 900 (C) $4 500 (D) $5 300 120. What is the cost of raw materials consumed?
116. Mr. A. Jones paid $250 for repairs to machinery. This transaction was entered in the Cash Book and posted to the ledger. How was this transaction recorded? (A) Debit Cash A/c; Credit Repairs A/c (B) Debit Cash A/c; Credit Machinery A/c (C) Debit Repairs A/c; Credit Cash A/c (D) Debit Machinery A/c; Credit Cash A/c
121. What is the prime cost?
Item 117 refers to the information below which was taken from the books of John Smith, a grocer.
T. Samm owed J. Smith J. Smith owed W. Wallace A. Blackie loaned J. Smith
(A) $800 (B) $1 200 (C) $3 900 (D) $4 500
$75 $40 $75
(A) $3 900 (B) $5 200 (C) $5 300 (D) $6 800
117. Whose account would appear in the ledger of J. Smith as a debtor?
Item 122 refers to the following figures taken from a manufacturing account Prime costs 29 950 Factory overheads 11 250 Direct manufacturing wages 22 000 122. What is the cost of raw materials consumed?
(A) J. Smith A/c (B) T. Samm A/c (C) W. Wallace A/c (D) A. Blackie A/c
(A) $7 950 (B) $8 700 (C) $11 750 (D) $33 000
Item 118 refers to the following information:
123. P is to join X and Y in partnership. P brings to the partnership as capital, furniture valued $3 000 and a motor van $5 000. In addition, he is to pay a premium of $1 000 to be shared between X and Y. How much would be the amount of P’s capital?
Fixed Assets at cost Accumulated depreciation to date Rate of depreciation per annum
20 000 1 000 10%
118. How much would be provide for depreciation this year using the reducing balance method?
(A) $4 000 (B) $6 000
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collected was $180, and this included the amount outstanding from 1995. What was the outstanding subscription at December 31, 1996?
(C) $8 000 (D) $9 000
Item 124 refers to the information below.
The Assets and Liabilities of Mr. Smith Cash Stock Creditors Debtors Bank overdraft
(A) $20 (B) $24 (C) $32 (D) $36
$ 320 410 500 75 100
129. A company purchased $1 500 worth of paint and was told that if the amount was paid within ten days, it would only have to pay $1 350. The reduction in cost represented a
124. What is Mr. Smith’s capital? (A) 10% cash discount (B) 10% trade discount (C) 15% mark down (D) 20% quantity discount
(A) $55 (B) $205 (C) $405 (D) $495 Item 125 refers to the correcting entries in John Brown’s Debtors Ledger shown below:
B. Scott A/c A. Scott
B. Scott
20
A. Scott A/c 20
125. Which of the following is a satisfactory reason for making the correcting entries? (A) B. Scott paid A. Scott (B) An error was made in debiting B. Scott’s A/c instead of A. Scott’s (C) John Brown paid A. Scott (D) An error was made in crediting B. Scott’s A/c instead of A. Scott’s 126. John Smith is employed at $8 per hour. He is paid time and a half for hours of work in excess of 44 hours per week. Last week he worked for 50 hours. His gross earnings were: (A) $324 (B) $400 (C) $424 (D) $600 127. The term ‘capital expenditure’ refers to (A) Expenses paid from the sum invested (B) Money spent for purchasing fixed assets (C) All the expenses for a particular period (D) The amount used to repay long-term liabilities 128. A club had 50 members, each subscribing $4 per year. On December 31, 1995 subscriptions outstanding were $16. During the year 1996, the total subscription
130. Under which of the following circumstances can an asset (furniture) be increased? I. Liability is credited II. Capital is credited III. Purchase of more furniture IV. Owner brings in more furniture (A) I and II only (B) I and III only (C) II and III only (D) III and IV only 131. Brown sold a motor vehicle worth $2 000 to Smith. Smith was allowed a 2% cash discount. How much would smith have to pay Brown? (A) $1 950 (B) $1 960 (C) $2 002 (D) $2 040 132. Because of an error in posting, the Purchases Account was understated by $100 in respect of goods purchased on credit. What are the journal entries necessary to correct this error? (A) Debit Supplier Credit Purchases (B) Debit Purchases Credit Supplier (C) Debit Debtors Credit Purchases Returns (D) Debit Purchases Returns Credit Debtors 133. While postings to the ledger you noticed C. Huck entered on the debit side of the three-column Cash Book. Which of the following entries to the ledger would you make?
14
(B) General Ledger only (C) General Ledger and Purchase Ledger (D) Purchase Ledger only
(A) Debit Cash Account (B) Debit Account of C. Huck (C) Credit Cash Account (D) Credit account of C. Huck
139. A firm buys goods on credit. Which document does the firm use to record this?
134. A proprietor wins a motor van valued $10 000 and decides to put it into the business. The entry should be (A) Debit Motor Vehicles Account; credit drawings account (B) Debit capital account; credit motor vehicles account (C) Debit motor vehicles account; credit capital account (D) Debit bank account; credit capital account 135. In a business, the total assets were $9 000 and the total liabilities were $3 000. A vendor offered $10 000 for the business. What amount was given for goodwill? (A) $1 000 (B) $2 000 (C) $4 000 (D) $16 000
(A) Credit note (B) Purchase invoice (C) Sales invoice (D) Supplier’s statement 140. Another name for authorized capital is (A) Liquid capital (B) Working capital (C) Fixed capital (D) Nominal capital 141. The Imprest system saves time in the posting of expenses to the nominal accounts because
136. Red and Blue trading in partnership decide to admit Green as a partner, on condition that he pays them a premium of $1 200. Profits were shared equally before the admission of Green. Premium is to be shared in the same proportion in which they shared profits. What entries would be made to record the sharing of the premium between the partners? (A) Debit Partners’ Capital account; Credit Cash (B) Debit Red $600 and Blue $600; Credit Premium $1 200 (C) Debit Cash; Credit Green’s C apital account (D) Debit Cash $1 200; Credit Red $600 and Blue $600 Item 137 refers to the following information: Mohammed Ali Statement of Affairs As at December 31, 1998 $
$
Fixed Assets
2500
Capital at Beginning
Current Assets
3000
+ Net Profit
?
- Drawings
300
Capital at end Liabilities 5500
$
3000
? 1500
142. John Jones pays his employees by cash. How will he record this payment in his books? (A) Debit Wages A/C Credit Employees’ A/c (B) Debit Employees’ A/c Credit Wages A/c (C) Debit Cash A/c Credit Wages A/c (D) Debit Wages A/c Credit Cash A/c 143. Louis and Mein are in partnership and share profits equally. Louis capital is $2 000 and Mein capital is $3 000. Nat, who is admitted to the partnership, brings in a capital of $3 000 and a premium of $2 000 to remain in the business. What will be the capitals of Louis, Mein and Nat respectively after Nat’s admission to the partnership?
5500
137.What is his net profit for the year? (A) $1 300 (B) $1 500 (C) $1 600 (D) $1 800
138. Goods bought on credit from X and Y are returned before they are paid for. X keeps a full double entry system. Where will X record the return of goods? (A) Cash Book and Sales Ledger
(A) A small number of payment is involved (B) An analysis system is involved (C) The Imprest position is always restored (D) Petty cash vouchers are used
(A) $2 000; $3 000; $5 000 (B) $2 000; $3 000; $3 000 (C) $3 000; $4 000; $3 000 (D) $2 800; $4 200; $5 000 Item 144 refers to the following information
Kelly B. Hind borrows $2 000 from the credit union. The rate of interest is 1% per month on the outstanding balance. Mr. Hinds installment are $120 per month payable at the end of the each month.
15
144. For the first month his interest payment is
(A) $2 600 (B) $5 500 (C) $6 200 (D) $6 800
(A) $1.00 (B) $2.00 (C) $10.00 (D) $20.00
150. The closing capital is
145. Which of the following when overcasted would result in a fall in the cost of production? (A) Purchase of raw materials $20 000 (B) Closing stock of raw materials $10 000 (C) Direct labour $30 000 (D) Factory overheads $45 000
151. Which of the following is entered in the Purchases Account of a grocery?
146. The purpose of book-keeping in business is to
(A) Goods for sale (B) Duplicating machines (C) Typewriters (D) Office stationery
(A) detect financial difficulties in the business (B) record transactions in a prescribed manner (C) design a system for records in the business (D) interpret financial statements of the business
152. Which of the following are nominal accounts?
Item 147 refers to the following information Motor Vehicle Creditors Debtors Capital Buildings
(A) $20 000 (B) $20 700 (C) $21 800 (D) $22 800
(A) Machinery and plant (B) Stock and debtors (C) Creditors and fixtures (D) Wages and rent
$2 000 3 000 2 000 11 000 10 000
147. The table above shows a list of balances. What is the total of the assets?
153. Two methods of stock evaluation, Last in First Out and First in First Out, were compared after calculating a closing stock of 50 units. L.IF.O. gave a closing stock of $350 and F.I.F.O. gave a closing stock of $400. What conclusion can be drawn from this?
(A) $12 000 (B) $13 000 (C) $14 000 (D) $15 000
I. II. III. IV.
Items 148 - 150 refer to the balance sheet below. Balance Sheet of Beta Shoe Store As at September 30, 1990
(A) I only (B) II only (C) II and IV only (D) III and IV only
Capital at start Less loss for the year Less Drawings
$ 24 000 2 200 21 800 1 800
$
20 000 Creditors Accrued Expenses
2 100 1 200 3 300 23 300
148. The total assets are (A) $11 200 (B) $14 500 (C) $20 000 (D) $23 300 149. The working capital is
$ $ Leasehold Premises 10 000 Furniture, Fittings and Equipment 14 500 Inventories (Stock) Debtors Bank Current A/c Cash in Hand
2 500 3 700 2 100 500 8 800 23 300
Prices were rising. Prices were falling. Prices were neither rising nor falling. Profit will be understated if L.I.F.O. is used.
154. If closing stock is 900 units, the purchases 7 000 units, the sales 6 500 units, the cost price per unit $1.50 and the selling price per unit is $2.00, then the cost of the closing stock is (A) $1 400 (B) $1 600 (C) $2 100 (D) $2 800 Item 155 refers to the following information. Carriage Inwards Sales Returns Inwards Purchases Closing Stock
125 5 500 365 4 520 920
16
Using the information above, what is the cost of goods sold? (A) $3 620 (B) $3 745 (C) $4 645 (D) $4 985 156. If the closing stock is undervalued, which of the following would result? (A) Net profit overvalued; gross profit undervalued (B) Cost of goods sold overvalued; gross profit undervalued (C) Gross profit overvalued; net profit undervalued (D) Goods available for sale u ndervalued; gross profit overvalued 157. How should the totals of the Discount Allowed and Discount Received columns be posted when the Cash Book is ruled off? (A) Debit Discount Allowed Credit Discount Received (B) Debit Discount Allowed Credit Cash (C) Debit Discount Received Credit Discount Allowed (D) Credit Discount Received Debit Cash
158. Mr. Rouse accepted from Ms. Smith $150 as full settlement of the $200 owing to him for purchases. In which account would Ms. Smith record the difference of $50? (A) Discount Allowed (B) Cash Received (C) Discount Received (D) Suspense 159.Which of the following documents should be used to inform a customer of an undercharge on an invoice? (A) Credit note (B) Advice note (C) Debit note (D) Pro forma invoice 160.Which of the following entries should be used to post Sales Returns? (A) Debit Sales Returns Account, Credit Sales Account. (B) Debit Sales Returns Account, Credit the account of the person retuning the goods (C) Debit Sales Account,
Credit Sales Returns Account. (D) Debit the account of the person returning the goods Credit Sales Returns Account 161. An item of $50 for goods sold to L. Harry was posted from the Sales Journal to the credit of L. Harry’s account. What effect will this have on the Balance Sheet of the business? (A) Debtors overstated by $50 (B) Debtors understated by $50 (C) Debtors overstated by $100 (D) Debtors understated by $100 Item 162 refers to the following information. M. Peter $ Purchases Returns 1.50 162. Which of the following documents would provide information for recording the above entry? (A) Credit note (B) Debit note (C) Purchase invoice (D) Cheque 163. The time card of M. Haynes shows 40 regular hours at $4 an hour and 7 hours overtime at $5 per hour. How much is his total earnings? (A) $160 (B) $195 (C) $200 (D) $600 164. The balance in the cash account indicates (A) How much profit was made (B) The true worth of the business (C) How much is owed to the business (D) The cash held by the business 165. Which of the following errors will affect the totals of the trial balance? (A) Payment of $35 cash to R. Cee & Co. Ltd entered in the Cash Book only (B) A machine sold for $300 entered in Sales Account instead of Machinery Disposals (C) $40 goods bought from C. Forte entered in G. Forte’s Account (D) Sale of $78 to R. Phillips entered as $87 in the books
166. Which of the following is neither capital nor revenue expenditure? (A) The sum disbursed for typewriters (B) The secretary’s salary (C) A donation of $200 to charity
17
(D) The Payment of $250 telephone bill 167. A business carried on by two or more persons with a view to sharing profits is called a (A) Private company (B) Public limited company (C) Partnership (D) Proprietorship 168. In converting from ‘single entry’ to ‘double entry’, the source from which details will be extracted is the
173. A credit balance b/f in the Sales Ledger Control A/c represents an overpayment (A) To creditors (B) By debtors (C) To debtors (D) By creditors 174. Employees of a business are entitled to annual profit sharing bonus of 20%. Profit for the year was $10 000 before tax and bonus. If tax is to be 30%. What is the amount for bonus? (A) $1 400 (B) $2 000 (C) $4 400 (D) $7 000
(A) General Ledger (B) Subsidiary Books (C) Statement of Affairs (D) Bank Reconciliation Statement 169. Which of the following accounts show how profits and losses are shared among partners? (A) Profit and Loss Account (B) Appropriation Account (C) Current Account (D) Income and Expenditure Account 170. When a company issues new shares at a price above face value, the increase is
Item 175 refers to the following information: Stock at Jan. 1, 1994 $ 500 Purchases during the month $1 200 Cost of goods sold $1 400 175. What is the stock at the end of January? (A) $ 300 (B) $ 700 (C) $ 500 (D) $1 200
176. The purpose of an appropriation account is to (A) Gross Profit (B) Net Profit (C) Capital Profit (D) Normal Profit 171. The reward of profit received by a shareholder in a limited company is called (A) Commission (B) Interest (C) Drawings (D) Dividends
177. In which book would a trader enter the writing-off of a debt of a bankrupt customer?
Item 172 refers to the extract from the records of a business, shown below. Opening Capital Closing Capital Drawings Additional Capital
1 000 2 000 400 600
172. According to the information given above, the resulting position is a (A) Profit of $1 000 (B) Loss of $1 000 (C) Profit of $800 (D) Loss of $800
(A) Change capital expenditure as agreed upon in the Articles of Association (B) Show how the net profit is distributed in a partnership or co-operative (C) Make appropriate changes related to net profit as agreed upon in the Articles of Association (D) Enter all capital and revenue expenditure as stipulated in the Partnership Act
(A) Sales Journal (B) General Journal (C) Returns Journal (D) Purchase Journal 178. Credit notes issued for goods returned by customer will be entered firstly in the (A) Returns outwards book (B) Returns inward book (C) Sales returns and allowances account (D) Purchases returns and allowances account 179. A Suspense Account was opened for an error of $30 found in the trial balance. Later it was observed that sales were understated by $30. This item would be corrected in the journal by
18
185. A club treasurer, found, on closing his books, that $50 subscription had been paid in advance. Where would this amount appear? (A) On the debit side of the Income & Expenditure Account (B) On the credit side of the Income and Expenditure Account (C) Among the Liabilities on the Balance Sheet (D) Among the assets on the Balance Sheet
(A) Dr. Trading, Cr. Suspense (B) Dr. Suspense, Cr. Goods (C) Dr. Sales, Cr. Suspense (D) Dr. Suspense, Cr. Sales 180. Goods were purchased from M. Smith on credit for $2 400 but posted to N. Smith’s Account. The item would be corrected in the journal as follows (A) Dr. M. Smith Cr. Purchases
$2 400, $2 400
(B) Dr. M. Smith Cr. N. Smith
$2 400, $2 400
(C) Dr. Purchases Cr. M. Smith
$2 400, $2 400
(D) Dr. N. Smith Cr. M. Smith
$2 400, $2 400
181. Which of the following is a Book of Original Entry and also a part of the General Ledger. (A) Cash Book (B) Journal (C) Sales Day Book (D) Purchases Day Book
182. On January 1, a firm’s capital is $4 600. On December 31, of the same year, the following information was provided: Drawings $850, Total assets $10 000, Loan outstanding $950, Creditors $4 000. What was the net profit that year? (A) $ 450 (B) $1 300 (C) $1 400 (D) $1 700 183. Which of the following is NOT a nominal account? (A) Carriage inwards (B) Commission (C) Furniture (D) Discount allowed 184. In preparing the accounts of a club, the account which is used to record expenses and income is called the (A) Revaluation Account (B) Income and Expenditure Account (C) Appropriation Account (D) Manufacturing Account
186. Which of the following are NOT cash transactions? I. Bought goods paying by cheque II. Sold goods receiving payment on delivery III. Paid balance owed to M. Merchandanny IV. Sold motor lorry on two years terms (A) I and III only (B) II and III only (C) II and IV only (D) II, III and IV only
187. A plant valued at $4 000 is depreciated at 10% per annum using the diminishing balance method. What is its value after TWO years? (A) $3 200 (B) $3 240 (C) $3 920 (D) $3 980 188. The balances of the asset accounts of the Bayroe Club as at June 30, 1994 were: Premises Equipment Furniture Bank and cash Stock of refreshments
$5 400 $1 825 $ 960 $1 640 $ 72
The amount of his accumulated fund was (A) $1 640 (B) $4 497 (C) $8 185 (D) $9 897 189. To record a credit sale to S. John, which of the following entries must be made? I. II. III. IV.
Debit Sales Account Credit Sales Account Debit S. John’s Account Credit S. John’s Account
(A) I and II only (B) I and IV only (C) II and III only (D) II and IV only
19
Item 190 refers to the following Appropriation Account: Appropriation Account
Taxation reserve Preliminary Transfer to general reserve Preference share dividend Ordinary share dividend
$ 10 000 250 4 000 1 200 6 000
$ 894.50 26 106.50
By balance Net profit
190. What conclusions could be drawn from the above Appropriation Account? I. II. III. IV. (A) (B) (C) (D)
191.
Cost of raw materials Manufacturing wages Rent and taxes Indirect wages Royalties Machinery depreciation General Expenses
The company has recently come into existence. The company is engaged in profitable enterprise. The company is not doing too well. More dividends can be given to the ordinary shareholders. II and IV only III and IV only I, II and IV only I, III and IV only
$ 7 800 $21 000 $ 1 000 $ 9 000 $ 200 $ 600 $ 400
From the factory expenses given in the above table what is the production cost of goods manufactured? (A) $29 000 (B) $30 000 (C) $39 000 (D) $40 000
194. A statement that gives the financial position of a business at a specific date is a (A) Trial balance (B) Balance Sheet (C) Trading Account (D) Working Paper 195. An invoice is a document made out when goods are (A) Overcharged (B) Returned (C) Undercharged (D) Sold 196. Which of the following assets is the MOST liquid?
192. Prime Cost is $79 110 and overheads is $4 720. What is the cost of production? (A) $ 4 720 (B) $74 390 (C) $79 110 (D) $83 830 193. B. Black purchased goods for $400 and received 10% discount. Later he returned goods worth $100, because they were faulty. How much did he receive for the goods returned? (A) $ 10 (B) $ 40 (C) $ 90 (D) $1 000
(A) Cash (B) Debtors (C) Equipment (D) Stock
197. The petty cash system saves time in the posting of expenses to the nominal accounts because (A) A small number of payments is involved (B) An analysis system is involved (C) The imprest position is always restored (D) Petty cash vouchers are used.
198. What are the functions of a book-keeper? I.
Analysing
20
II. Interpreting III. Posting IV. Recording (A) I, II and III only (B) I, II and IV only (C) I, III and IV only (D) II, III and IV only
(D) Sales Return Day Book
199. Overtime rate is calculated at the regular rate plus half the regular rate. The regular rate is $3.00 per hour for a 40-hour week. David worked for 48 hours. His gross pay was therefore
206. When balancing the bank column of the Cash Book a credit balance indicates
(A) $120 (B) $144 (C) $150 (D) $156
205. Closing entries are prepared for (A) Real Accounts only (B) Personal and Real Accounts (C) Nominal and Drawings Accounts (D) Nominal and Personal Accounts
(A) An overdraft (B) That an error has been made (C) A loss over the trading period (D) That cheques have been dishonoured
207. The totals of a payroll register for an employee are given below:
200. When money is taken from cash and paid into a bank account the recoding is referred to as
Gross salary Union dues Income tax National insurance ens on
(A) Personal drawings (B) The imprest (C) Cash takings (D) Contra entry
$3 000.00 10.00 430.60 32.40 .
The net pay would be 201. Prepaid rent will appear on the Balance Sheet of the paying company among the (A) Current Assets (B) Current Liabilities (C) Fixed Assets (D) Long-term Liabilities
202. Which of the following does NOT have a credit balance? (A) R. Smith (Supplier) A/c (B) Rent Received A/c (C) Purchases A/c (D) Salaries Owing A/c 203. A club bought a tennis table for $400 cash. It should be entered in the club’s books in the (A) Receipts and Payments accounts only (B) Receipts and Payments and the Statement of Affairs (C) Receipts and Payments and the Income and Expenditure accounts (D) Income and Expenditure and the Statement of Affairs
(A) $2 460.50 (B) $3 593.50 (C) $2 658.30 (D) $3 056.50
208. The following information relates to the wages for June 30, 1986: June 1 June 15 June 30
Balance still outstanding Paid wages by cash Paid wages by cheque
The total wages to be written off to the Profit and Loss Account for June 1986 is (A) $ 50 (B) $150 (C) $300 (D) $350 209. If Mr. Grey returns goods to a supplier, how should Mr. Grey record this in his books? I.
204. The Denvor Company hired you as an account clerk. On April 3 you received an invoice along with goods from D. Kamin & Co. Ltd. for $600. Where should you record this entry? (A) Sales Day Book (B) Purchases Return Day Book (C) Purchases Day Book
$ 50 $200 $150
Enter transaction in Sales Returns Day Book (Sales Returns Journal) II. Enter transaction in Purchases Returns Day Book (Purchases Returns Journal) III. Post to debit side of Supplier’s Account IV. Post to the credit side of Supplier’s Account (A) I and III only (B) I and IV only
21
(C) II and III only (D) II and IV only
(C) $18 (D) $24
210. Which of the following gives a correct definition of the ‘double entry’ system of accounting?
215. For a firm, which of the following performs the same functions as a club’s Income and Expenditure Account?
(A) Every account is recorded twice. (B) Every transaction is concerned with at least two accounts (C) Every entry is recorded twice. (D) Every two entries are recorded in the same account.
(A) Petty Cash Book (B) Profit and Loss Account (C) Cash and Bank Account (D) Balance Sheet Item 216 – 217 refers to the following information.
211. The excess of the income over the expenditure of a non-profit-making organisation is called (A) Gross Profit (B) Net Profit (C) Accumulated Fund (D) Surplus 212. John Jones paid his employees’ wages in cash. How will he record this payment in his books? (A) Debit Wages A/c Credit Employees’ A/c (B) Debit Employees’ A/c Credit Wages A/c (C) Debit Wages A/c Credit Cash A/c (D) Debit Cash A/c Credit Wages A/c 213.
Cost of goods sold Sales Selling Expenses Administrative Expenses Reserves appropriated for the Current year
$ 68 000 100 000 8 000 12 000 3 000
From the table above, what is the maximum amount that could be used for dividends?
W’s Capital: X’s Capital: Y’s Capital: Z’s Capital:
$300 $200 $100 $300
W, X, Y and Z are partners sharing profit and loss in proportion to their capital. What is Z’s share of profit of $72? (A) $ 8 (B) $12
Assets $ Cash in hand 55 Prepaid rent 120 Furniture & Fittings 800 Debtors 1 650 Land & buildings 8 000 Cash at bank 1 500 Motor Vehicles 4 000 Stock 800
Liabilities$ Bank overdraft Creditors Wages due
1 750 1 250 75
216. His current assets is
217. His capital is
(A) $2 625 (B) $3 125 (C) $4 005 (D) $4 125
(A) $13 750 (B) $13 850 (C) $14 750 (D) $14 850
These general instructions refer to item 218 – 225. For each group of items below, there is a common set of options labeled (A), (B), (C), and (D). In answer to EACH item an option may be used more than once, once or not at all.
Item 218 – 220 are based on the information below. Extract from Trading Account of a trader
(A) $ 6 000 (B) $ 9 000 (C) $12 000 (D) $15 000 214.
The table below gives the assets and liabilities of A. Jackman, a sole trader, at a certain time.
Sales Purchases Gross Profit Closing Stock Sales Returns Opening Stock
$36 000 22 000 11 000 6 000 1 000 8 000
(A) $ 7 000 (B) $ 9 000 (C) $24 000 (D) $30 000 218. What is the Cost of goods sold? C
22
219. What is the stock available? D
following entries in the General Journal would correct the mistake?
220. What is the average stock held? A Items 221 – 223 are based on the information below. Company X is legally allowed to sell 40 000 shares at $5 par value. 30 000 of those shares were taken up by the public, but the company only collected $100 000 initially.
I. II. III. IV.
Debit Sales A/c Credit Sales A/c Debit Suspense A/c Credit Suspense A/c
(A) I and II only (B) I and III only (C) I and IV only (D) II and III only
All shares are sold at par value. (A) $200 000 (B) $150 000 (C) $100 000 (D) $ 50 000
228. The purchase of a motor van on credit from Things Caricom Motors Co. for use in the business should be recorded as
221. How much is the paid-up capital? C (A) Debit Motor Van Expense Account, Credit Bank Account (B) Debit Purchases Account, Credit Things Caricom Motors Co. Account (C) Debit Motor Vehicle Account, Credit Bank Account (D) Debit Motor Vehicle Account, Credit Things Caricom Motors Co. Account
222. How much is the issued capital? B 223. How much is the authorized capital? A Items224 – 225 refer to the information below. Capital Long-term liabilities Bank Loan Current liabilities Creditors
$ 50 000
$ Fixed Assets Machinery Vehicles
$
25 000 20 000 45 000
15 000
5 000
Current Assets Stock Debtors Bank
4 000 6 000 15 000 25 000 70 000
70 000
I. II. III. IV.
Keeping proper records of business transactions Keeping proper control of the finances of a business Assisting management in making decisions Using the accounting transactions to make proper decisions
(A) I and II only (B) II and IV only (C) I, II and III only (D) I, III and IV only
(A) $70 000 (B) $50 000 (C) $25 000 (D) $20 000
230. The book of original entry used to record the purchase of fixed assets on credit is the
224. What is the working capital? D 225. If $2 000 worth of stock is purchased on credit, what would be the new working capital? D 226. Capital R. Winsome Capital H. Winsome
229. Which of the following statements describe the purpose of accounting?
$60 000 $30 000
(A) General Journal (B) Sales Journal (C) Purchases Journal (D) Return Inward Journal
231. Mr. Henry’s book disclosed the following details: The table above shows how R & H Winsome have combined their interests into a partnership. If interest on capital was agreed at 5 per cent, what is the total amount of interest on capital earned by them? (A) $1 500 (B) $2 500 (C) $3 000 (D) $4 500 227. A book-keeper by mistake posted $64.00 to the Sales Account instead of $54.00. Which of the
Opening stock Purchases Returns on purchases Closing stock What is the cost of goods sold? (A) $3 030 (B) $4 530 (C) $4 750 (D) $6 270
$ 760 $3 890 $ 750 $ 870
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232. Which of the following are nominal accounts? (A) Machinery and plant (B) Stock and debtors (C) Creditors and fixtures (D) Wages and rent
(A) Profits only (B) Losses and profits (C) Capital only (D) Profits, losses and capital 237. Given the following information for a firm, what is the closing capital?
233. Which of the following is NOT classified as direct material? (A) Lumber in a furniture shop (B) Fuel oil for furniture workshop engine (C) Carriage inwards on limestone in a cement factory (D) Transistors purchases for radio assembly plant 234. The principal document to be registered with the Registrar of Joint Stock Companies, which would determine the rights of the members in a private company is the (A) Memorandum of Association (B) Prospectus (C) Certificate of Incorporation (D) Articles of Association Item 235 refers to the following information Debtors at start of the year Cash received from debtors During the year Debtors at the end of the year
$8 200 17 400 9 300
Opening capital Total closing assets Total closing liabilities
$ 500 $4 000 $1 000
(A) $1 400 (B) $2 500 (C) $3 000 (D) $3 500 238. A club had 100 members and the subscription is $1 per year. However, three members paid $2 each because they owed for the previous year and one member paid for the next member paid for the next year. The others paid the annual subscription. What is the income from subscription for that year? (A) $ 96 (B) $100 (C) $103 (D) $104
239. The summarized position of Foster and Scott Limited at March 6, 1996 was:
235. The above information was provided by a trader. How much were his credit sales for the year?
Current liabilities Current assets Fixed assets Long term liabilities
(A) $16 300 (B) $18 500 (C) $25 600 (D) $26 700
What was the capital of Foster and Scott Limited at March 6, 1996?
236. The assets in the Balance Sheet of a sole trader are listed in
(A) $ 40 000 (B) $ 90 000 (C) $150 000 (D) $190 000
(A) Order of liquidity (B) Order of permanence (C) Alphabetical order (D) Chronological order
240. Which of the following BEST describes a trial balance
237. Invoices sent to customer are entered in the (A) Sales Journal (B) Purchases Journal (C) Return Inwards Journal (D) Return Outwards Journal
238. A partner has a “one sixth (1/6) interest” in a consulting partnership. This means one sixth (1/6) of the
I. II. III. IV.
60 000 100 000 200 000 150 000
A list of balances of accounts A financial statement An account A check on the accuracy of the double entry system
(A) I and II only (B) I and IV only (C) I, II and III only (D) I, III and IV only
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Item 241 refers to the following information. $ Bank balance August, 1994 700 Purchase of refreshments 500 Purchase of furniture 500 Sale of equipment 600
241. What is the bank balance in the Receipts and Payments Account for the year ended July 31, 1995? (A) $ 900 (B) $1 600 (C) $2 850 (D) $3 950 242. Patrick is to join Dennis and Tony in partnership. Patrick brings to the partnership as capital, furniture valued at $3 000 and a motor van worth $5 000. In addition, he is to pay a premium of $1 000 to be shared between Dennis and Tony. How much would be the amount of Patrick’s capital? (A) $4 000 (B) $6 000 (C) $8 000 (D) $9 000 243. K. Khan, a debtor of A and B Enterprises settles his debt of $120 less 2 ½% discount, by cheque. The double entry in the books of A and B Enterprises should be (A) Dr. K. Khan Dr. Discount Received Cr. Bank (B) Dr. K. Khan Dr. Discount Allowed Cr. Bank (C) Dr. Bank Dr. Discount Allowed Cr. K. Khan (D) Dr. Bank Cr. Discount Received Cr. K. Khan
$117 $ 3 $120 $117 $ 3 $120 $117 $ 3 $120 $117 $ 3 $120
244. Company X is legally allowed to sell 40 000 shares at $5 000 par value. 30 000 of those shares were taken up by the public, but the company only collected $100 000 initially. All shares were sold at par value. How much was the authorized capital? (A) $ 50 000 (B) $100 000 (C) $150 000 (D) $200 000
Stocks July 31, 1995 Donations to charity Depreciation of furniture Proceeds from raffle
$ 2 000 200 50 1 500
245. Goods were bought from James Holt for cash. Which of the following is the correct double-entry to record the transaction? (A) Debit Purchases A/c Credit James Holt A/c (B) Debit Purchases A/c Credit Cash A/c (C) Debit James Holt A/c Credit Cash A/c (D) Debit Cash A/c Credit James Holt A/c 246. Peter, Gail and John formed a partnership. When the partnership deed was drawn up no mention was made as to how profits and losses were to be divided. How should the profits be shared among them? (A) In proportion to their capital contributed (B) In ratio to how much work is done by each partner (C) Divided equally among the three partners (D) Divided in accordance with each partner’s age
